Pr. Commissioner Of Income Tax-8 vs Turnkey Electrical Engineers Pvt ...
2023 Latest Caselaw 9360 Bom

2023:BHC-OS:9674-DB                                                   5-7-8-ositxa-2229-2018+.doc




                             IN THE HIGH COURT OF JUDICATURE AT BOMBAY
                                 ORDINARY ORIGINAL CIVIL JURISDICTION
                               INCOME TAX APPEAL (IT) NO. 2229 OF 2018
                                                        WITH
                               INCOME TAX APPEAL (IT) NO. 2243 OF 2018
                                                        WITH
                               INCOME TAX APPEAL (IT) NO. 2247 OF 2018
                 Pr. Commissioner of Income Tax - 8, Mumbai                      ... Appellant
                       Versus
                 Turnkey Electrical Engineers Pvt. Ltd.                          ... Respondent


                 Mr. Suresh Kumar for Appellant.
                 None present for Respondent.


                                                   CORAM             K. R. SHRIRAM &
                                                                     DR. N. K. GOKHALE, JJ.

                                                   DATED:            6th September 2023
                 P.C. :

1. The Revenue is impugning a common order passed by the

Income Tax Appellate Tribunal ("ITAT") pronounced on 13th

September 2017 for the Assessment Years 2006-2007, 2007-2008,

2008-2009 and 2009-2010. Assessee had filed four Appeals and

the Revenue had filed one Appeal for the Assessment Year 2008-

2009. The facts under all the Appeals were identical except the

difference in the figures of addition on account of bogus purchases.

2. On facts it was found that the Assessing Officer ("AO") had

not made any independent enquiry before making the

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disallowance of entire purchases from three parties viz. Bhavika

Enterprises, Sahyog Enterprises and Supreme Enterprises. AO had

not rejected the books of account or the sales/consumption of

assessee. AO disallowed the entire purchases by holding that the

assessee failed to produce any satisfactory evidence to show the

actual purchase of the material transportation and consumption

details.

3. The Commissioner of Income Tax (Appeals) ("CIT(A)") while

considering the Appeal of assessee examined the bills raised by the

three parties mentioned earlier and concluded that the delivery

challan does not mention any vehicle number and there was no

signature of the receiver. The CIT(A) was not satisfied with the

explanation offered by assessee and confirmed the entire

disallowance made by AO.

4. The ITAT after considering the submissions made, came to

the correct conclusion that even if the transactions are not

verifiable, the only taxable amount will be the taxable income

component therein and not the amount of entire transactions.

5. Considering the facts of case, the ITAT restricted the addition

to 12.5% of the alleged bogus purchases and while doing so relied

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upon the judgment of Bombay High Court in the case of

Commissioner of Income Tax - 8 v. Shri. Hariram Bambani 1. The

High Court had held that the Revenue is not entitled to treat the

entire sale consideration to tax but only the profit attributable to

the total unrecorded sale consideration alone can be subject to tax.

6. The view taken by the ITAT is a reasonable and possible

view. Thus no substantial question of law arises for our

consideration.

7. Appeals dismissed.

(DR. N. K. GOKHALE, J.) (K. R. SHRIRAM, J.) GITALAXMI KRISHNA KOTAWADEKAR

Digitally signed by GITALAXMI KRISHNA KOTAWADEKAR Date: 2023.09.08 19:36:31 +0545

1. Income Tax Appeal (IT) No. 313 of 2013 dated 04.02.2015 (Unreported).

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